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E-Commerce Retailers Still Scrambling To Get Last-Mile Logistics Right

The 2018 holiday season has ignited competition among online retailers to get goods to consumers faster than ever, which means the last mile is now more important than ever. Where distribution space near dense population centers doesn't exist or isn't sufficient, retailers are improvising.

Demand for warehouse space will push rents up another 22% this year, Prologis reported.

For instance, Amazon has set up delivery operations out of large tents on vacant land in a few markets, the Wall Street Journal reports.

“If it works, next year we will probably see other people doing the same thing,” Transwestern's Steve Kozarits told the WSJ.

The holiday season, while a passing phenomenon, illustrates the last-mile conundrum for e-commerce firms and their space needs. The problem is that a lot of people, mostly urbanites, live inconveniently far from sophisticated distribution centers.

That means the industry needs new industrial product that is adapted for urban settings — such as multistory industrial as well as new ways to handle packages once they are on their way down the last mile, and once they have landed at customers' residences.

In a recent report, DHL and Euromonitor identified four trends that are shaping urban last-mile transportation: localized delivery, flexible delivery networks, seasonal logistics and evolving technologies.


“The last mile is increasingly becoming the key battleground in the e-commerce supply chain, and companies will have to develop targeted strategies in this area to compete effectively,” DHL Chief Commercial Officer Katja Busch said in a statement. “It’s not just about transportation, but about companies’ overall approach to managing inventory — getting the right items to the right place at the right time."

Another proposed last-mile strategy involves the post office. The U.S. Treasury Department reported recently that the U.S. Postal Service could charge package delivery companies for access to the mailboxes, generating much-needed revenue for the USPS and a more consistent place for packages to end their journeys.

For that to happen, Congress would have to change a Depression-era law that forbids anyone but the USPS from delivering to mailboxes.

“We have a great relationship with our customers,” UPS CEO David Abney told CNBC. “We go to most everyone’s houses, but getting access to the mailbox would be an even closer connection.”

Another last-mile problem bedeviling e-commerce is package security after delivery, with porch pirates becoming a serious problem for apartment owners and residents across the country. 

Access to mailboxes might help that problem, but so might publicly accessible common carrier freight lockers. Those would be places where all retailers (not just Amazon) could leave packages, Fast Company reports.